Calculate the compound interest on ₹ 18,000 at 10% per annum in two years.

For the first year:

P = ₹ 18,000, R = 10 %, T = 1 year

$\text{Interest} = \dfrac{P \times R \times T}{100}\\[1em] = \dfrac{18,000 \times 10 \times 1}{100}\\[1em] = \dfrac{180,000}{100}\\[1em] = ₹ 1,800$

Amount at the end of first year = P + I

= ₹ 18,000 + 1,800

= ₹ 19,800

For the second year:

P = ₹ 19,800, R = 10 %, T = 1 year

$\text{Interest} = \dfrac{19,800 \times 10 \times 1}{100}\\[1em] = \dfrac{198,000}{100}\\[1em] = ₹ 1,980$

Amount at the end of second year = P + I

= ₹ 19,800 + 1,980

= ₹ 21,780

Compound Interest = Final amount - Initial Principal

= ₹ 21,780 - ₹ 18,000

= ₹ 3,780

Hence, the compound interest at the end of second year = ₹ 3,780.